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LPG Dynamics in Focus

Sept. 22, 2023

The VLGC owners have experienced an extremely strong year, with rates achieving their highest levels since 2015.  One of the primary catalysts behind this robust performance is the burgeoning demand for LPG in the Far East, particularly in the context of Propane Dehydrogenation (PDH) plants which convert propane into propylene and further to plastics.  Platts has reported the inauguration of two PDH plants in China during the first 8 months in 2023, and an additional five plants to become operational by year-end, each boasting 600-660,000 mt/year capacity.

On the LPG supply side, the two primary load regions for ...

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Mexico's Pemex Refinery Impact

Sept. 15, 2023

According to Mexico’s Energy Minister Rocio Nahle, the nation’s Dos Bocas refinery operated by state company Pemex is expected to run at its full capacity by the end of this year.  The refinery, with a capacity of 340,000 b/d, is projected to mainly consume local heavy crude.  The tightening crude balances in Mexico could result in less available exports to the US Gulf, where the heavy Maya grades have been very attractive post OPEC+ production cuts.  With approximately 70% of the Mexico>US Gulf volume being carried by Aframaxes, the surged growth in Aframax Caribbean>US ...

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Russian Price Cap and Recent Cargo Flows

Aug. 25, 2023

The Russian price cap has always had two objectives: reducing Russia's revenues from oil exports and ensuring that oil continues to flow to global markets. If Western maritime services are used, attestations must be kept showing Russian oil was bought under US $60.  In July, Russia’s leading Urals-grade crude began trading at above $60 a barrel—above the cap the Group of Seven economies set for Russian oil last December to allow Russia to continue selling and keep global prices low while still choking off revenue to Moscow. Analysis suggests that a large portion of its exports are ...

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CII & Alternative Fuel Analysis

Aug. 18, 2023

Analysis of VLCC’s CII rating basis 2023 requirements for the past 5 years show how on average half of the VLCC fleet falls in D&E CII category – meaning that they would have to provide a management plan of how to improve their CII rating to at least midpoint of C rating for the following year.

An ageing VLCC fleet (on average 12 years old) and limited new orderbook will not likely see the CII ratings improving for the sector.  However, when we look at the VLCC newbuilding orderbook, we find that 79% or 11 out of 14 vessel ...

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China Deflation Fears

Aug. 11, 2023

Weekly Highlight 8.11.2023 – China Deflation Fears

The latest inflation data released over night showed China’s consumer and producer prices contracting for the first time since 2020. Slowing demand at home and abroad, combined with a real estate market that continues to struggle has caused suppliers to rapidly cut prices. Deflation would have the potential to slow the Chinese economy even further, prompting calls for additional stimulus measures.

Contrary to the US and EU which have been trying to quell inflationary pressures, China faces concern of stagnating growth and falling prices (Figure 1).  If there is an extension ...

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